With Apple's launch of the iPhone 5 and myriad new device announcements from Amazon, HTC, Motorola, Nokia, and Samsung, we pointed out that these devices are just one element of a broader ecosystem battle. Apple's product announcements at its San Jose, California, event this morning evince the company's continued ability to exert a superior gravitational pull on its customers and partners than its competitors. Here's why:
Customers get more choice in design and use model. Since Apple's 2010 introduction of the iPad, its competitors' tablet products have only clicked with customers in a separate category: smaller, handheld tablets directly targeted to content consumption — like Amazon's Kindle Fire and Google’s Nexus 7. The new iPad mini’s design suits this use model but is also complementary to the larger iPad line because of its portability — perfectly suited to a range of enterprise applications like field service, where a larger tablet is cumbersome. We expect that many iPad owners, both enterprise and consumer, will add an iPad mini to their portfolio, as will iPhone owners — the new shared data plans from AT&T and Verizon Wireless help simplify the decision to include LTE in their iPad mini.
A new form factor enters the ecosystem without requiring any adaptation. Because the iPad mini display features the same specs as the iPad 2, neither customers nor developers need worry about compatibility or adaptation. All the apps and sites just work. The new device slots into the app and content ecosystem seamlessly — and into the support system that CIOs have put in place for enterprise tablets.
Apple mastered the role of mass market volume and the role of the content ecosystem when it took iPod down market with the iPod Mini in 2004 and iPod Shuffle and iPod Nano in 2005, even as it steadily improved the iPod itself. Apple thus staved off competition from competitors like Creative, iRiver, Samsung, and Sony by offering a player at every price point. The result is a persistent domination of the MP3 player market and its attendant ecosystem: app store, customer base, and content portfolio. In other words, iPod Mini, iPod Nano, and iPod Shuffle made the Apple ecosystem powerful and momentous.
But while Apple created the modern tablet market, its dominance was not assured with a single form factor. Despite that the App Store has 275,000 iPad-specific apps. Despite the fact that already 200 million people are running Apple's latest iOS6 operating system. Despite the fact that Apple has paid $6.5 billion to developers building iOS apps so far. (These numbers all crush the Android and Windows mobile ecosystems.)
Despite all that, our Forrsights Workforce data shows that Apple's share of tablets in the workforce shrank from 67% in 2011 to 53% in Q2 2012. Samsung and Kindle Fire, took the bulk of that shift: Samsung has 13% of the global workforce tablet installed base in Q2 2012 and Kindle Fire has 5%. Both brands rely on small form factor tablets.
We are just at the start of the earnings releases on Q3 2012 vendor revenues and a week and a half from the first release of US GDP data on business technology investment in the quarter, but it is already clear that Q3 2012 will be a weak one in terms of tech market growth. IBM reported a 5% revenue decline its third quarter; Microsoft had an 8% decline in total revenues, and we estimate a 5% decline in its sales to business; and Tibco had a 3% drop in its revenues for its quarter ending August 31, 2012. Oracle's software revenues for its quarter for the same period rose by 2% (with license revenues down 1%); and Accenture saw its revenues for the same period rise by just 2%. While there have been some positives — Tata Consultancy Systems' revenues were up by 13%, and Adobe had a 7% increase in its revenues — weakness has been the dominant story so far.
Is this the start of a downward trend in the tech market? I don't think so. Yes, there continues to be weakness in Europe, with most countries there in or close to recession. But the US economy seems to be gathering strength, with consumer confidence on the rise, retail sales increasing, and the housing sector improving. China, which had been showing signs of slowing growth, also appears to be picking up. So, the economic fundamentals are pointing toward an improving tech sector in Q4 2012 and 2013.
I’m attending Apple’s special event tomorrow and Microsoft’s Windows launch on Thursday in NYC, though I won’t be at the Google and Microsoft events early next week. I’m tuned in for hints of where personal computing technology is going — how will mobile and PC influence one another?
Back in April, I wrote about the idea of “frames,” a new form of peripheral displays or all-in-one PCs that work tightly with your mobile device or laptop. When you arrive at a desk and sit down to work, these frames would automatically display your work from the mobile or laptop, so you can continue working seamlessly on a large screen. And not just a large screen, one that has sensors, extra computing power, and a wireless connection.
So I’ll be watching for things like support in Apple’s Macs for receiving AirPlay from mobile devices or Microsoft announcing how SmartGlass might make it possible for your tablet and desktop PCs to work together better.
What kinds of cooperation features are you envisioning that make mobile and PC technologies work together better?
Windows 8 is a make or break product launch for Microsoft. Windows will endure a slow start as traditional PC users delay upgrades, while those eager for Windows tablets jump in. After a slow start in 2013, Windows 8 will take hold in 2014, keeping Microsoft relevant and the master of the PC market, but simply a contender in tablets, and a distant third in smartphones.
Microsoft has long dominated PC units, with something more than 95% sales. The incremental gains of Apple’s Mac products over the last five years haven’t really changed that reality. But the tremendous growth of smartphones, and then tablets, has. If you combine all the unit sales of personal devices, Microsoft’s share of units has shrunk drastically to about 30% in 2012.
It’s hard to absorb the reality of the shift without a picture, so in the report “Windows: The Next Five Years,” we estimated and forecast the unit sales of PCs, smartphones, and tablets from 2008 to 2016 to create a visual. As you can see below in the chart of unit sales, Microsoft has and will continue to grow unit sales of Windows and Windows Phone. But the mobile market grew very fast in the last five years, while Microsoft had tiny share in smartphones and no share in tablets.
If you look at the results by share of all personal devices, below, you can see how big a shift happened over the last five years as smartphone units exploded and the iPad took hold.
We're excited to announce the first set of winners of the 2012 Forrester Groundswell Awards, honoring the best employee mobile, collaboration, and innovation stories. These awards are being announced today at Forrester's Digital Disruption Forum in Orlando. (The B2B and B2C awards will be announced next week). Once again we received many outstanding entries, but we gave extra points to the most innovative solutions with a measurable impact. Several themes emerged out of this year's entries:
Giving iPads to sales people is a hot mobile use case. We had multiple entries from organizations that give sales people or channel partners access to sales tools and resources on tablets. Replacing paper-based processes with always-current material is convenient, cheaper than printing, and also creates an opportunity to wow customers during the sales process.
Companies are empowering employees with social tools to solve customer problems. In a world where technology has given customers incredible amounts of power, companies with turgid processes and departmental boundaries cannot be nimble enough to serve them. Only your employees can help — and they can only help you if you unleash them to use the same technologies that empower your customers. Both the winner and the runner-up in this year's Collaboration Program category integrated public social networks with internal business applications and used gamification to incent desired behaviors.
Microsoft Windows will power just one-third of personal computing devices sold during 2012. Say what? Over the past five years, the transition to mobile devices has transformed Microsoft’s position from desktop dominance to one of several players vying for share in a new competitive landscape.
And so Microsoft is making some very bold moves to transform Windows: creating a singular touch-native UX for a seamless experience across PCs and mobile devices, building an app store distribution model, and engaging its vast user base to develop core personal cloud services.
You’ll learn about the trends and behaviors shaping a painful, but ultimately successful, five-year migration for the Windows franchise. We will size and forecast the future of Windows’ presence in a device landscape where market share is measured across all computing devices, not just PCs. And we will outline the new personal computing success metrics for OS providers and ecosystems, which look beyond device market share to customer engagement across multiple formats, online services, and content delivery.
Dan Bieler, Frederic Giron, Brownlee Thomas, Ph.D., Stefan Ried, Christopher Mines, Pascal Matzke, Jennifer Belissent, Ph.D.
T-Systems hosted its 2012 analyst and sourcing advisor event recently. To be sure, T-Systems remains one of the most advanced true ICT providers in the European market. But T-Systems ought to demonstrate more clearly how it can support and enhance business process for its customers and improve the customer experience for its customers’ customers. Of course T-Systems is not alone. The ICT industry needs to emphasize proven capabilities in delivering enterprise-grade ICT solutions ranging from co-management of infrastructure resources to full outsourcing.
T-Systems, like many of its competitors, is busy making sure that it does not bleed too much in what T-Systems calls the red ocean, i.e., the highly competitive market segment of legacy services. That's a good start. At the event, T-Systems communicated very clearly the progress at its internal production factory. This aspect is critical for streamlining and standardizing the portfolio, boosting margins, and developing products and services that the revamped sales team then can actually sell. One tangible outcome of this effort shows through in the high customer satisfaction level and deal wins like BAT, OMG, and Georg Fischer. Importantly, T-Systems also has put in place a rigorous certification framework for ensuring quality of service with suppliers.
However, T-Systems still needs to convince in areas of the blue ocean, i.e., the emerging innovative market segment. Like many of its competitors, T-Systems is not finding this easy. Why? Because T-Systems continues to prop up its legacy business: selling technology solutions.
Actually, most customers do not directly compare Oracle with Salesforce.com, as organizations buy very different things from these two vendors. While Oracle has a diversified portfolio of middleware components and a bunch of business applications, Salesforce still clearly makes the majority of its revenue from its SaaS CRM products, delivered exclusively via a native public cloud. You are also welcome to read the blog of my colleague James Staten, who explored Oracle Oracle’s cloud announcements in detail.
The other day I had an interesting discussion with Google about their Fiber-to-the home (FTTH) infrastructure. Google’s reasoning behind the move into the network infrastructure space stems from the belief that online growth and technology innovation are driven by three main factors:
The cost of storage, which has fallen considerably in previous years.
Computing power, which has increased in previous years.
The price and speed of Internet access, which has been stagnant for a decade. Today, the average Internet user in the US receives 5 Mbit/s download and 1 Mbit/s upload speed.